Tips to Establish a Salary Range

Establishing a salary range that reflects your actual income requirements is important. Granted, it's perfectly natural to want to jump at the first job offer that comes along. But at the same time, there's no point in taking a job that won't pay the bills. That wastes everybody's time and can lead to frustration as well as financial problems for you down the road.

Once you know what your compensation range is, the whole process of finding a job becomes much easier because you know how low you can go and can eliminate prospective jobs that fall outside your range.

What Is a Salary Range?

A salary range is the span between the lowest salary and the highest salary a company can offer to pay an employee for a particular job. As a job seeker, your salary range is the range of pay you would agree to in order to accept a job offer. Granted, you likely wouldn't have a maximum number, but you most definitely should have a minimum number. We can help you figure out what to say when an employer asks for salary range.

Develop a Budget

You need to do some research to come up with your realistic salary range. Take a hard look at your living expenses. Take a piece of paper and make three columns to determine which expenses are fixed, which are variable, and which are discretionary. Here are some examples:

• Fixed expenses: mortgage payment, rent payment, and car payment
• Variable expenses: 12-month average of electric bills, phone bills, heating bills, and grocery bills
• Discretionary expenses: entertainment, travel, gifts, and credit card purchases

Whip out the calculator and start adding up the fixed expenses—the predictable, ongoing expenses. Then add in the variables. Finally, do a monthly average of discretionary expenses. Add all that up, and you should have a fairly accurate picture of what it costs each month to maintain your current standard of living. This is the amount of take-home money you must earn to at least maintain your financial status quo.

While that number may not represent the salary level you want, it will tell you the amount of income below which you cannot go without making some budget cuts.

Trim the Fat

Depending on your personal financial situation, you might want to consider reducing some of your discretionary expenses, especially if you've been out of work for an extended period of time.

Set Realistic Salary Expectations

Many people seem to get caught up in the “they're not offering what I'm worth” syndrome. Realize that what you may think you're worth really doesn't matter as much as what the prospective employer thinks the job is worth. Check Monster's Salary Guide to see what the going rate for your job and experience is in your location.

Determine Your Salary Range

Once you've determined your salary requirements to keep body and soul together, make that the bottom of your salary range, and add $10,000 to that number to establish the top of your range. Some argue that you should add $20,000 to establish the top of your range, but where you put that top amount depends on how willing and able you are to negotiate once an offer is made.

Now, if you're asked what are your salary requirements as part of the application process, you can do it without worrying about pricing yourself out of the market or grabbing a job that won't pay the bills.

Know What You're Worth

Establishing a livable salary range is just one aspect of the job offer that you need to weigh when deciding whether or not to sign on the dotted line. Could you use some more info? Make a free profile on Monster. We can send you career advice, job search tips, and negotiating insights to help you keep your career on the rise.